Their new pacing reports provide real-time analysis of local markets and comparative insight into performance versus last year – giving hoteliers the edge they need to stay competitive. With these innovative features, users can easily navigate the uncertain hospitality market of 2023 while staying ahead of the competition, optimizing rates, and maximizing revenue.Īs a busy hotel manager or operator, keeping up with market trends and adjusting pricing strategies can be challenging. It also requires revenue management systems that are the latest and most sophisticated to keep pace.PriceLabs, a leading provider of innovative and easy-to-use dynamic pricing and revenue management solutions for the accommodation industry, has launched its new pacing reports, a valuable tool designed specifically for hoteliers, hostel managers, and aparthotel operators. Being able to determine the best price for each of your customer segments while adjusting them based on real-time forecasting data provides you with the information you need to drive profits.
The ‘low to high’ approach would increase room rates as occupancy increased.ĭynamic pricing optimization provides hotels with the ability to efficiently make informed choices about their rates.
With the ‘high to low’ approach, you’d begin booking your rooms a higher rate for each segment then reduce the rate after a certain time, which helps to increase occupancy if bookings aren’t matching forecast expectations. If bookings are at a lower volume, you’d use the ‘high to low’ approach, and vice versa for higher volume. After determining the rates for each segment, you will then split each segment into two or more smaller segments. With this method, your revenue manager would utilize either what’s known as a ‘high to low’ or a ‘low to high’ approach. Adopt a Multi-Tiered Pricing StrategyĪnother way to drive profits using dynamic pricing optimization is to combine both of the above concepts into a multi-tiered pricing strategy. Conversely, it will also adjust rates down if bookings lag behind the forecast’s expectations. For example, if your bookings for a particular day exceed your demand forecast, your RMS will suggest higher rates for the following booking period. By closely monitoring demand and inventory over time, you’ll be able to adjust pricing to maximize bookings and profits.
Your revenue management system must also factor in variables like channel cost, segment loyalty, ancillary spending, and so forth to assess each segment’s value and ideal rate.Ī dynamic pricing optimization strategy is also able to adjust for any fluctuations in demand on a daily or even hourly basis. By looking at each segment’s booking patterns, you’ll determine both who the most valuable guests are and what price to offer based on the value of each segment to your hotel. “You’ll start by forecasting at a segment level to understand the value of each guest segment,” says Skodol. “A revenue management forecast will look at your hotel’s inputs and potential demand and help you make decisions to determine what your ideal mix of that demand that for your hotel to reach your best forecast result.” Rates Will Adjust for Guest Segments and DemandĪ thorough awareness of your hotel’s guest segments is a crucial component of dynamic pricing. “There’s really no effective way to apply dynamic pricing without a revenue management forecast,” says Skodol. Start With a Solid Forecastĭan Skodol, Vice President of Revenue Analytics at Rainmaker says that to have dynamic pricing, you must start with an accurate revenue management forecast. Here, we’ll address the three pillars to dynamic pricing optimization so that your pricing strategy is as competitive and profitable as possible. Having a firm grasp of the core concepts of dynamic pricing optimization is crucial to having an effective strategy. With the rise of OTAs and distribution costs, it’s also never been as competitive. Thanks to advances in technology and methodology, hotel pricing has never been more efficient or profitable. In the past decade, pricing in the hospitality industry has come a long way.
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